How to spend money the right way so you become richer

Spend money wisely will make you rich. Is it a right statement or not? I don’t know as I’m not rich but the article from one of famous financial blogger in Malaysia will help us to look on how to spend money the right way and become rich.

Here are some thoughts on saving, spending, and investing money based on one who is earning RM5,000 a month.

Thought 1: It takes more than saving money to become rich

You should save at least 30% of your monthly income if you wish to fund a comfortable retirement.

If you make RM5,000 a month, save RM1,500 a month or RM18,000 a year. But, is this enough to retire rich in 10, 20 or even 30 years’ time? No.

Read Why We Want You To Be Rich : Why You Must Get Your Own Copy

Thought 2:Is investing the answer to retiring young and rich?

In general, there are three asset classes to increase your wealth:

• Stocks: This is a reliable way to earn passive income on a quarterly/semi-annually basis while waiting for share prices to rise.

You will have to rely heavily on accounting and investing skills to build a profitable stock portfolio. If you don’t have these, best to acquire them before investing in stocks.

• Real estate: The better deals are not in the primary market but in the secondary (sub-sale) and auction markets.

Participating in these markets requires a bigger initial capital (at least RM100,000) and if you don’t have cash-in-hand, stay out.

What about cashback properties in primary markets, multiple loan submissions and mark-up deals? If you earn RM5,000 a month, best to refrain as you are putting yourself at greater financial risk if your investment is a mistake.

• Businesses: It is a good asset class because you can start a business with a small capital, with low risk and be creative with it.

There are entrepreneurs who began small and built recurring streams of income from their businesses. But, entrepreneurship can be challenging and not suitable for all.

If you’ve got an idea and are willing to pursue it with dog-like determination, entrepreneurship may be suitable for you.

Thought 3:Aim to be financially secure

You may save and invest but the question is if you have lost the ability to generate income due to illness, or an accident, how will you pay your medical bills and living expenses?

The first “good expense” is life and medical insurance. If you have these, make sure your coverage is sufficient.

A basic standalone medical card is around RM50–70 per month if you’re in your 20s. A medical card is great for anyone who is financially tight. You may upgrade it over time once your finances are more stable.

Thought 4: Learn about expenses that could double or triple your income

If you earn RM5,000 monthly, aim for an increment in income to RM10,000 per month. However, will this take twice the amount of workload, time, and energy? Absolutely not!

Your level of income, to some extent, is not dependent on your labour, time and physical effort. Instead, ideas, insights, technical know-how, networking and influence can double, triple or even quadruple your income.

But how much should you spend to acquire these?

If you’re in sales, attend sales and marketing workshops, lunch with the top salespeople in your company, or read books and watch video tutorials on salesmanship.

Spend on things that can help generate new business ideas and clients that would result in an increase in income. These are “good expenses” and probably better investments than stocks and real estate.

It all depends on your field or industry. If you’re an accountant, obtain a professional certificate such as ACCA, CFA, CPA, etc.

If you’re in medicine, engineering, law, etc, pursue courses and certifications that enhance your knowledge and abilities thus, positioning yourself towards a higher income.

Thought 5: Get a proper financial education

From the article “Two Magic Numbers for Comfortable Retirement”, the second magic number is 10%. It represents the Return On Investment (ROI) that you should aim for when investing.

It is a benchmark figure if you wish to retire young and rich. Here’s a secret to boosting your ROI in investing in any asset class – education.

Those who want to get rich through investing typically ask a series of questions like what they should invest in and when. But this is like asking for a magic pill to build wealth without hard work.

Investing involves a lot of study, research, and homework. Investors who prepare stand a better chance at attaining a better ROI from an investment compared to those who don’t.

This is applicable to all asset classes. If this deters you, best not to invest. Put your money in a fixed deposit account instead.

But, if you wish to be a profitable investor, get a financial education through self-learning from books, seminars, workshops, webinars, online courses, coaches, brainstorming and networking sessions. All these are considered “good expenses”.

This article first appeared in

Hm. How about your though? Okay, it is up to you. As I know, I want to become richer in next 2 years. Help me please.

Who want to be rich? I'm one of them but it ain't easy as we
I just received an ebook by one of famous finance blogger in Malaysia, He

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